Fictional corrupt politicians are a mainstay of The Wire, David Simon's celebrated television series about life on the Baltimore streets. But the show's creator says he fears a real-life explosion of rampant corruption in American political life if the newspaper industry, in which he worked for more than a decade, is allowed to collapse.

In an exclusive interview with the Guardian, the award-winning writer and producer launches a tirade against newspaper owners who, he says, showed "contempt for their product" and are now reaping the whirlwind. But he rejects the idea that newspapers should seek ways to embrace the new world of free information, arguing that they must urgently start charging money for content distributed online.

"Oh, to be a state or local official in America over the next 10 to 15 years, before somebody figures out the business model," says Simon, a former crime reporter for the Baltimore Sun. "To gambol freely across the wastelands of an American city, as a local politician! It's got to be one of the great dreams in the history of American corruption."

The only hope, Simon insists, is for major news outlets to find a way to collaboratively impose charges for reading online, and to demand fees from aggregators such as Google News, which profit from their journalism. "If you don't have a product that you're charging for, you don't have a product," he says. "If you think that free is going to produce something that's as much of a cost centre as good journalism – because it costs money to do good journalism – you're out of your mind."

The number of readers willing to pay a small fee each month might never rival the heyday of newspaper circulation, but it would attract enough "people who care what's going on in the world" to fund crucial reporting, he maintains. "And once they do that, and go to Google and Yahoo and every other search engine and say: 'No, ain't no free.'" He scoffs at the notion that amateur "citizen journalism", or new online-only outlets, might take the place of newspaper reporters: "The internet does froth and commentary very well, but you don't meet many internet reporters down at the courthouse."

Critics of the paid model for online news argue that it has been tried and rejected – notably at the New York Times, which abandoned its TimesSelect service in 2007 – and that those instances in which it has proved successful, including the Wall Street Journal, are exceptional cases.

They say media outlets must find ways to embrace and profit from the exposure offered by aggregators such as Google News, and that walling off their material will hasten their irrelevance. Anti-trust laws also present severe legal obstacles to collaboration between news organisations.

Jeff Jarvis, a new media consultant who writes a column for the Guardian, said: "The traditionalists are trying to transplant elements of the old business model into a new business reality ... when you put your content behind a wall, you lose more than you gain. You lose a lot of readers and the advertising revenue associated with them, you lose the ability to be discovered by new readers, you lose out to free competitors, of whom there'll be an unlimited supply, and you lose influence, because you're taken out of the conversation."

Having completed five seasons of The Wire and Generation Kill, a mini-series about the Iraq war, Simon is currently shooting a pilot for Treme, his proposed new series about musicians in post-Katrina New Orleans. It will feature at least two veterans of his earlier work: Clarke Peters, who played Lester Freamon in The Wire, and Wendell Pierce, who played Bunk Moreland. If commissioned by HBO, Simon promises, Treme will remain true to the philosophy he pungently encapsulates in the phrase "Fuck the average viewer". His shows, he explains, reject the conventional TV wisdom that everything must be explained upfront, instead demanding intense concentration from viewers, who must grapple with an unfamiliar world.

Rather than writing for a general audience, he says: "I want to write for the guy living the event."

On Monday, BBC2 will start giving The Wire its first airing on British terrestrial television, screening all five seasons in a late-night slot five nights a week.